As usual, I must caution that this doesn’t mean China or the CCP will collapse anytime soon, and there are even some tepid signs that the economy may have hit bottom. Regardless, it’s a wildly important and uncertain situation amplified by the U.S. elections, and thus makes for must‐see‐TV throughout 2024.
Will This Be AI’s Earthquake Year?
This time last year, everyone was freaking out—in good ways and bad—about ChatGPT and other “artificial intelligence” products that were acing human tests, making cool “original” art, and writing (superficially) impressive prose in response to simple language “prompts.” As we discussed in February, numerous reports warned that these products would quickly usher in an era of mass joblessness and other sci‐fi dystopias. In March, Elon Musk and another 1,000 or so “tech leaders” were so rattled by AI that they openly called for a six‐month moratorium on the most advanced systems, warning that they present “profound risks to society and humanity.”
Then … nothing happened.
Ok, fine, not nothing: Last year, the technology continued to improve at a rapid clip, was increasingly adopted by U.S. businesses, catalyzed some amazing scientific breakthroughs, and certainly destroyed some American jobs (including fashion models!). However, the public‐facing tech still has some problems—see, for example, this recent analysis from Stanford economist Joy Buchanan and colleagues about GPT‑4’s continued “hallucinations” (e.g., fake citations) or this new image showing how AI image creators still suffer from basic spelling problems. AI is also (predictably) helping to support U.S. companies and jobs, not just destroy them, because humans are quickly adapting to incorporate the technology into their routines or to adjust their work to do things AI still can’t do well. And, of course, there are the not‐insignificant facts that unemployment in the United States remains well below historical averages, and that—now almost four months since the AI moratorium would’ve ended—the techno‐apocalypse is nowhere in sight.
AI technology thus appears to be following the same general trajectory as the earth‐shattering ones before it—gradual, uneven advancement causing real‐but‐manageable disruptions thanks to good ol’ human ingenuity and adaptation. Will 2024 be any different?
What Will Happen in Argentina?
Finally, there’s Argentina and the aftermath of this fall’s shock presidential election victory of brash libertarian(ish) economist Javier Milei.
When Milei first started gaining steam, I was of two minds. On one hand, Argentina’s economy has long been a statist disaster, and Milei was saying lots of good free‐market things about how to turn things around. On the other hand, the guy was … umm … quirky and saying lots other things that would give even an open‐minded libertarian like me serious pause. His election was, as my Cato colleague Ian Vasquez said at the time, itself a remarkable accomplishment— “articulating a clear, liberal alternative to Peronism with popular support and electoral success”—but governing was another story. Beyond his personality quirks, Milei was a political neophyte inheriting an economy in crisis and a divided government full of bureaucratic enemies. He’ll have his every move scrutinized by skeptical media hoping to confirm anti‐libertarian biases. And, as such, there remain plenty of reasons to worry that the “libertarian government” in Argentina will—fairly or not—become a cautionary tale instead of a vindicating success.
However, there’s a lot Milei can do without Argentina’s legislature, and his early speeches, appointments and free‐market policy moves—aka “economic shock therapy”—have been mostly well‐received by financial markets and wonks (not just libertarians!) alike. Just this week scholars with the center‐left Peterson Institute called Milei’s early moves—devaluing the currency, cutting spending and regulation, lifting price controls, slashing civil service jobs, privatizing state‐owned enterprises, liberalizing trade, and weakening unions—and his future plans “full of economic and political risks” but seemingly offering “the maximum chances of success given the constraints he faces.”
But, boy, are there big constraints and risks remaining. Beyond the economy’s legacy problems and the inevitable (promised) pain that reforms will inflict, strong resistance to Milei’s agenda has unsurprisingly materialized. A court last week, for example, suspended his sweeping labor reforms after the country’s biggest union challenged it (Milei’s team will appeal), and protests have erupted in Buenos Aires. Many of his plans, especially dollarization, remain unfinished and/or dependent on legislative support. There’s still a very long road to hoe.
Still, what’s emerged so far is undeniably positive and unlike the chainsaw‐wielding “Trump‐like” caricature of Milei we Westerners saw in the media before Argentina’s presidential election. (Some of that caricature was undoubtedly intentional by Milei, if only to attract attention.) I challenge you to watch this video from the indispensable Milei Explains account on Twitter and not be blown away by both the discussion (substance and delivery) and the idea that this guy is anything (hair‐notwithstanding) like Donald J. Trump: